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The Perversity of Cutting the International Climate Budget

Rain drops illuminated by the sun, fall over Pompei valley in Huaraz, Peru, on December 3, 2014.

The United States has long considered itself a nation at the forefront of addressing global challenges—not only through diplomacy and military action but also through foreign aid. This is not mere altruism. As Sen. Marco Rubio (R-FL) recently highlighted, foreign assistance represents only a fraction of the federal budget—indeed, the entire international affairs budget accounts for only approximately 1 percent of U.S. spending—but it is integral to U.S. interests.

The same is true for the subset of foreign aid that promotes low-carbon and climate-resilient development. Congressionally appropriated funding for multilateral and bilateral climate initiatives account for only an estimated 0.04 percent of the federal budget per year from 2010 through 2015. Yet this aid plays a key role in promoting economic prosperity and security in the United States.

The United States has therefore developed a legacy of bipartisan support for climate-related development assistance, including support for multilateral channels such as the Climate Investment Funds, or CIFs, and the Green Climate Fund, or GCF. The United States pledged $2 billion to the CIFs during the George W. Bush administration and $3 billion to the GCF during the Obama administration. In 2015, the GCF became operational. It now supports projects that range from developing early weather warning systems in sub-Saharan Africa to leveraging private-sector investment in renewable energy in Latin America.

On March 16, 2017, the Trump administration proposed an initial outline for the federal budget that would reduce combined funding for the U.S. Department of State and U.S. Agency for International Development, or USAID, by 28 percent; it would also reduce funding for Treasury International Programs by 35 percent. In addition, the outline specifically proposes eliminating funding for the GCF and the CIFs. It also eliminates the Global Climate Change Initiative, or GCCI, which was launched in 2010 to ensure that U.S. development assistance promotes low-carbon and climate-resilient growth. A range of multilateral and bilateral climate efforts have been funded under the GCCI budget line.

Any proposal to cut foreign assistance for clean energy development and climate resilience is deeply irrational. Because international climate initiatives protect U.S. economic and security interests, withdrawing funding would be at odds not only with the American value of aiding the vulnerable but also with the America-first philosophy that the current administration purports to espouse.

International climate finance is necessary for U.S. prosperity

Direct effects and costs of climate change

From 2012 through 2040, global demand for energy is estimated to increase approximately 48 percent. Economic and population growth in developing countries is driving this trend: Energy demand in countries that are not part of the Organisation for Economic Co-operation and Development, or OECD, is expected to increase 71 percent over the same period.

Without efforts to help low-income countries achieve economic growth through nonpolluting energy, the economic and human costs of climate change in the United States would increase along with increasing global temperatures. Every region in the United States already faces destructive effects of climate change, from water shortages and declines in crop productivity to damage from extreme weather. There were 15 severe weather events in 2016 alone with damages of more than $1 billion. Given the stress that climate change has already placed on U.S. communities, the nation cannot afford to backslide on its efforts to curb greenhouse gas pollution worldwide.

The role of climate finance in international development and the U.S. economy

Addressing poverty is impossible without also curbing greenhouse gas pollution globally and building resilience to its effects. Low-income countries are disproportionately vulnerable to the effects of climate change, despite the fact that they are often among the lowest emitters of greenhouse gases. Many of these countries are unable to provide basic services and cannot effectively respond to climate-driven disruptions to resources and livelihoods. As a result, the effects of climate change exacerbate poverty: The World Bank estimates that climate change could drive an additional 100 million people into extreme poverty by 2030.

Reducing global poverty is in line with American values; it is also in the interests of the American economy. As developing countries achieve economic growth and stability, they can become important export markets for American goods and services. Indeed, past recipients of foreign aid have become some of the United States’ largest trading partners. Economic growth abroad also facilitates foreign direct investment in the United States, which has played a key role in the U.S. economy. Foreign direct investment flows in 2015 reached $348 billion, supporting American employment, research and development, and exports of U.S. goods. Moreover, eight of the 10 countries that are the fastest-growing contributors to foreign direct investment in the United States are from the developing world. 

The climate–security nexus

Cutting U.S. support for low-carbon development would be perverse not only from the perspective of the U.S. economy but also from the perspective of U.S. security. The increasing frequency and severity of extreme weather events—coupled with long-term challenges such as sea-level rise—already pose a serious threat to U.S. military assets: By 2050, low-lying military bases along the eastern United States and Gulf Coast could be partly submerged 10 to 25 percent of the year by 2050.

Meanwhile, climate-related disruptions to food, water, and energy supply increase the risks of political volatility and human displacement. As U.S. Secretary of Defense James Mattis recognizes, “Climate change can be a driver of instability and the Department of Defense must pay attention to potential adverse impacts generated by this phenomenon.” Famine—driven by conflict and climate change—currently threatens nearly 20 million people in Yemen, South Sudan, Somalia, and Nigeria. Such climate-driven crises—which can be mitigated through support for climate-resilient development—put increasing pressure on U.S. military resources for disaster relief and humanitarian assistance.

Responsibility and influence

International climate finance is no longer the sole domain of the United States and its industrialized allies. Both developed and developing countries—including Colombia, Mexico, and Peru—have contributed to the Green Climate Fund. Meanwhile, China has committed more than $3 billion in climate finance through the South-South Cooperation Fund on Climate Change.

These countries recognize not only the moral imperative of investing in low-carbon and climate-resilient development but also the economic and security benefits—and they will obtain the global influence that follows from these investments. Eliminating U.S. support for climate-related development assistance does not put America first.

Gwynne Taraska is the Associate Director of Energy Policy at American Progress. Howard Marano is a Research Assistant for the Energy Policy team at American Progress. 

The authors thank Maria Belenky, Director of Policy and Research at Climate Advisers, for discussions on the U.S. international climate budget.